In general, merchants (e.g. proprietors of goods and services) participate in incentive programs to entice customers or consumers to purchase products or services; and website operators employ incentives schemes to incent consumers to visit their websites more frequently. Typically, merchants want to reward customers for purchasing merchandise and thereby fulfill the goal of conferring the maximum benefit on the customer while minimizing the merchant's overhead and cost.
One type of incentive program confers a single product, service or benefit to the customer as an award. The frequent flyer mileage program is an example of an incentive program that confers a single predefined benefit to the customer. In one frequent flyer mileage program, credit cards associated with airlines permit customers to receive frequent flyer miles in exchange for the customer's use of the credit cards. The frequent flyer incentive programs typically award the customer one frequent flyer mile for each dollar spent using the credit cards. The customer subsequently redeems the frequent flyer miles earned for airline tickets or upgrades in accordance with the rules of the frequent flyer mileage program.
In another type of incentive program, the customer may receive incentive “points” or stamps based on the value of a purchase. For example, if a customer purchases a $1,000 item, the customer may receive 1,000 points. For this type of incentive program the customer is also provided with a way to redeem the points. Typically, the customer may redeem the points by selecting items, such as merchandise or services, from a catalog.
Although the catalog provides the customer with a greater selection than the predetermined benefit program, the customer's benefit is constrained to items in the catalog. A merchant, when setting up the incentive program, must select how the customer will receive benefit. For example, the merchant may set up the incentive program with a vendor or supplier of the value, such as in a frequent flyer mileage program, so that the customer receives a pre-determined benefit (e.g., frequent flyer miles) after the customer purchases the merchant's product. Alternatively, the merchant may develop a catalog of merchandise for which the customer may redeem items based on the amount awarded. Accordingly, because the merchant desired to confer the maximum benefit on the customer, it is desirable, when implementing an incentive program, to provide the customer with a wide array of choices while minimizing the overhead required by the merchant to implement the incentive program.
As outlined above, incentive programs are currently used for credit card transactions, as well as other customer transactions performed at a merchant's store. However, data networks, such as the Internet, provide numerous opportunities for conducting electronic transactions, including transactions relating to electronic commerce. The potential for commerce over the Internet is great because a user, through the use of a computer connected to the Internet, may connect up with a huge number of merchants. Alternatively, the Internet allows merchants to connect up with a huge number of consumers. Because incentive programs are an effective way of motivating customers to purchase goods or services, it is desirable to implement an incentive program for use with the Internet.
An incentive program that gives awards to consumers for making a purchase is referred to as High Authentication Promotion (HAP) program. It is a HAP program because a consumer must provide detailed information about themselves to satisfy a high level of authentication in order to complete the purchase and earn the award. For example, the consumer may be required to provided their name, address and credit card number to complete the purchase. Another type of incentive program that is suitable for use with the Internet is referred to as a Low Authentication Promotion (LAP) program. The LAP program enables consumers to earn awards for activities that do not require the user to provide the same level of authentication normally found in a HAP. To participate in a LAP program, users may need to provide only minimal information about themselves, such as an email address. For example, a LAP program might award points to a participant for signing up for a promotional offer, clicking on a hyperlink, clicking on an image, referring-a-friend, filling out surveys, or downloading software. The points earned from such activities are associated with the participant's email address. Thus, it is possible for LAP programs to have very large consumer participation, since consumers are not required to make a monetary transaction or provide detailed information about themselves to participate.
As a result of the low threshold for participation and the potential for participation by large numbers of consumers, LAP programs are vulnerable to problems relating to over-participation and breaches of security. For example, if unexpectedly large numbers of consumers decide to participate in a particular LAP program, the value conferred by the program may exceed a desired maximum. With regards to security, since the threshold for participation is low, LAP programs may incur large losses in a relatively short time period due to fraud, misrepresentation or other security breaches. For example, one dishonest consumer can launch a type of automated program, referred to as a “bot”, that completes the requirements of a LAP program numerous times and provides different email addresses to which the points earned are associated. By consolidating the points associated with all the email accounts, the dishonest consumer will have received substantial value from the LAP program, albeit through fraudulent means.
However, since it is desirable to provide an enjoyable experience to consumers that participate in LAP programs, it is important that the mechanisms provided to implement the program do not overburden the consumers. For example, a LAP program that requires consumers to repeatedly provide detailed information to identify themselves would most likely overburden the consumer and result in low participation.